ICE cotton hits 2-year lows, traders waiting to buy at low prices

14 Jun '24

2 min read

ICE cotton hits 2-year lows, traders waiting to buy at low prices

Pic: Adobe Stock

Insights

ICE cotton faced pressure due to market confidence issues, despite better US export sales. Analysts attribute this to technical factors, with no fundamental support.
The US cotton July contract hit its lowest close since July 2022, while the December contract saw a slight increase.
The dollar index increased, making US cotton more expensive.

ICE cotton continued to face pressure as the market lacked confidence. Better export sales and shipments of US cotton could not improve market sentiments. Analysts feel that the market is currently moving on technical grounds, with no fundamental support. ICE contracts further lowered and touched two-year lows. Traders are waiting for a recovery in cotton buying at lower prices and for weather conditions to improve for the cotton crop around the world.

According to trade analysts, the US cotton July contract settled 39 points lower at 71.35 cents per pound (0.453 kg), making its lowest close since its contract low of 69.52 cents set on 11 July 2022. The December contract settled up 17 cents at 71.79 cents on Wednesday.

The dollar index was up again yesterday, finally settling above 105 levels, making US cotton more expensive for buyers. Crude oil was slightly lower, putting further pressure on cotton.

Yesterday, the trading volume was 53,297 contracts, with 61,038 contracts cleared the previous day.

The USDA Weekly Export Report showed net sales for the week ending 6 June at 360,800 bales (Upland 357,100/Pima 3,700), including 6,700 bales in cancellations. China remained the top US customer for the 2023-24 season with total commitments at 5,219,200 bales (shipped 4,249,000 bales). Weekly shipments were 195,600 bales (Upland 186,600/Pima 9,000).

On Friday, ICE cotton July 2024 was traded 0.15 cent higher at 71.50 cents per pound. Cash cotton was traded at 67.60 cents (down 0.39 cent), October (new crop) contract at 73.31 cents (up 0.58 cent), December 2024 contract at 72.14 cents (up 0.35 cent), March 2025 at 73.59 cents per pound (up 0.28 cent), and May 2025 at 75.09 cents (up 0.31 cent). Few contracts were seen at the level of the last closing, as trading was noted today.

Fibre2Fashion News Desk (KUL)

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